Offshoring and Outsourcing Industry in the Philippines 2011

News Articles for Outsourcing Industry

Business Process Outsourcing (BPO) is the fastest growing industry in the Philippines today, boasting a steady growth in annual revenue and covering about 15% of global outsourcing markets. A prime outsourcing destination in Southeast Asia, Philippine BPO employs 708,000 full-time employees, with 350,000 working in the country’s call center industry. The Business Processing Association of the Philippines (BPAP) estimates that about 61% of Philippine BPO workers are employed in the call center industry, 18.5% in back-office KPOs, 9.5% in IT software development and maintenance, 5.4% in Engineering, 3.2% in Transcription, and 2.2% in Animation. However, these numbers are still expected in increase in the coming years, as more and more foreign-based companies set up business operations in the Philippines.

The Philippines’ offshoring/outsourcing industry is composed of shared services offices and independent companies (captive).  Large multinational companies outsource in-house parts of their operations to the Philippines; international 3rd party providers offer services t from the Philippines to foreign multinationals and independent Philippine companies provide services to international clients. Through these options many offshore outsourcing services performed in the Philippines can be offered to companies of all sizes and needs. A wide range of outsourcing segments can already be found in the Philippines' outsourcing industry. The 2 main areas of expertise are Contact Centers and Business Process Outsourcing (BPO). The Philippines formerly ranked second in outsourcing worldwide, just after India.  However, recent developments in the global outsourcing industry have propelled the Philippines to the top spot, this according to data from IBM’s Global Locations Trend. The Philippines, according to the survey, has now overtaken India as the world’s number one country for shared services and business process outsourcing (BPO).This is the first time the Philippines has topped these industries. Philippine software development, medical & legal transcription, animation and engineering design outsourcing have also grown steadily over the past years.

The outsourcing or BPO industry is considered as one of the fastest growing industries in the world. Data from the Business Processing Association of the Philippines (BPAP) predicts that the country will rake in an average revenue of $11.6 billion, and employ 708,000 full-time employees by the year 2011. Industry experts are seeing a shift from cost-effectiveness to skills quality and competence. This development continues to strengthen the Philippines' position as an emerging global leader in the BPO and KPO industries.

The BPO boom in the Philippines is currently led by demand for offshore call or contact centers.  The Philippines raked in offshore service generating revenues of $2.1 billion in 2006, placing third behind India and China.  That's up 62% over the $1.3 billion it gained in 2004, and a huge increase from the start of the decade when the outsourcing industry in Manila employed just 2,400 people and the industry had revenues of merely $24 million. In December of 2010, the Philippines overtook India as the call center capital of the world, and now employs over 350,000 employees in the local call center industry, compared to India’s 330,000, this according to data from the Call Center Association of the Philippines. Philippine call centers generated roughly $6.3 billion in revenues in the year 2010, with the association estimating a15-20% increase by 2011, as more and more multinational companies continue to set-up outsourcing operations inside the country.

India-based call centers and BPOs are also expanding operations to the Philippines, including big name companies like Compvue, OmniGlobe, and TCS. Wipro Technologies, an outsourcing company headquartered in Bangalore, India, has already set-up a center in the Philippines, and now employs close to 2,000 employees.  Overall, Philippine outsourcing and BPO is projected to earn US$11 billion and employ 700,000 full-time employees by the end of 2011.

The recent growth spurt in the outsourcing industry in the Philippines has been fueled not by traditional low-value-added call centers but by the higher-end outsourcing or knowledge process outsourcing (KPO), including  legal services, accounting, business analysis, Web design, medical transcription, software development, animation, and shared services. Though call centers still comprise the largest part of the BPO sector, the Philippines has begun leveraging its creative design talent pool, vast amount of lawyers, and its CPAs or general accountants.

To achieve and sustain this rapid growth, the Philippine government is offering significant fiscal and non-fiscal incentives to attract direct foreign investment in the outsourcing industry as part of the 2006 Investment Priorities Plan. The IPP was prepared by the Board of Investments (BOI) of the Philippines, the government agency responsible for promoting investments in the country, and is focused on the sectors identified in the Medium-Term Philippine Development Plan (MTPDP) 2004-2010 (PBOI 2006).  Another government agency in the Philippines that offers tax breaks and incentives is PEZA. 

Many BPO facilities are located in the following areas:

• Makati
  
• Manila
• Ortigas
• Fort Bonifacio
• Eastwood
• Cebu City
• Baguio City
• Cagayan de Oro
• Clark
• Dagupan City
• Davao City
• Dumaguete City
• Lipa City
• Iloilo City
• Legazpi City 
  

Most Common Offshore Outsourcing in the Philippines

• Contact or Call Centers Outsourcing
• Software Development Outsourcing
• Web and Graphic Design Outsourcing
• Animation Outsourcing
• Game Development Outsourcing
• Online Marketing - SEO & SEM Outsourcing
• Engineering Design & Achitecture Outsourcing
• Medical Transcription Outsourcing
• Legal Transcription Outsourcing
• Finance & Accounting Outsourcing
• HR Administration Outsourcing
   

Philippines Outsourcing Workforce

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